LUX- A COMPREHENSIVE STUDY

ABSTRACT

Hindustan Unilever Ltd. is a well-known and largest FMCG company in India. HUL has always revamped
its products to meet the changing needs of the consumer without compromising on the quality. This
report deals with one of its premier brands "LUX". HUL leads the market in the toilet soap category with
54.3% market share. Lux has inched up to be on par with Lifebuoy in HUL's soaps portfolio. The Lux
brand now has an almost equal market share as Hindustan Lever's largest selling soap brand - Lifebuoy.
This report gives an overview of the history of the company and the brand "Lux", the various strategies
adopted to survive in the market for over 75 years and the various competing brands. The promotional
activities adopted, the brand's strengths and weaknesses, threats faced are also analysed. The FMCG
category is always a battleground for all the competing firms and the bathing soap category is no
different. With more firms entering the market, maintaining the customer base is not very easy. Within
six months, ITC's soap products have been able to capture 1.75% of the market share.
Table of Contents
ABSTRACT 2
TABLE OF CONTENTS 3
INTRODUCTION 4
INDUSTRY ANALYSIS 5
MAJOR PLAYERS 5
HINDUSTAN UNILEVER LIMITED (HUL) 7
a. Company profile 7
b. Mission 7
c. Principles of the Quality Policy 7
d. Present stature 8
e. Divisions 9
f. Hindustan Lever network 10
g. Exports 11
h. Water 11
i. Corporate Responsibility 12
LUX 13
STUDY OF LUX WITH RESPECT TO 4 P’s 14
a. Product 14
b. Promotion 16
c. Price……………………………………………………………………………………...22
d. Place 23
SWOT ANALYSIS 24
COMPETITOR ANALYSIS 26
MARKET SEGMENTATION 28
POSITIONING 29
BCG MATRIX 30
ANSOFF MODEL FOR LUX: 31
RECOMMENDATION 32
REFERENCES 33

Introduction

The origins of personal cleanliness date back to prehistoric times. Since water is essential for life, the
earliest people lived near water and knew something about its cleansing properties - at least that it
rinsed mud off their hands.

A soap-like material found in clay cylinders during the excavation of ancient Babylon is evidence that
soap making was known as early as 2800 B.C. Inscriptions on the cylinders say that fats were boiled with
ashes, which is a method of making soap, but do not refer to the purpose of the "soap." Such materials
were later used as hair styling aids.

Soap got its name, according to an ancient Roman legend, from Mount Sapo, where animals were
sacrificed. Rain washed a mixture of melted animal fat, or tallow, and wood ashes down into the clay soil
along the Tiber River. Women found that this clay mixture made their wash cleaner with much less
effort.

Some of the early instances of commercial manufacturing of soap are:

In Britain references began to appear in the literature from about 1000AD, and in 1192 the monk
Richard of Devizes referred to the number of soap makers in Bristol and the unpleasant smells which
their activities produced

A century later soap making was reported in Coventry. Other early centers of production included York
and Hull. In London a 15th century "sopehouse" was reported in Bishopsgate, with other sites at
Cheapside, where there existed Soper's Lane (later renamed Queen Street), and by the Thames at
BlackfriarsvAndrew pears. In 1789, he commenced production of a transparent soap at a factory in Wells
Street, off Oxford Street and became hugely successful.

Industry analysis
The toilet soaps market is estimated at 530,000 tpa including small imports. The market is littered over
with several, leading national and global brands and a large number of small brands, which have limited
markets. The popular and premium brands include Lifebuoy, Lux, Cinthol, Liril, Rexona, and Nirma.
Toilet soaps, despite their divergent brands, are not well differentiated by the consumers. It is,
therefore, not clear if it is the brand loyalty or experimentation lured by high volume media campaign,
which sustain them. A consequence is that the market is fragmented. It is obvious that this must lead to
a highly competitive market. Toilet soap, once only an urban phenomenon, has now penetrated
practically all areas including remote rural areas. The incremental demand flows from population
increase and rise in usage norm impacted as it is by a greater concern for hygiene. Increased sales
revenues would also expand from up gradation of quality or per unit value.

As the market is constituted now, it can be divided into four price segments: premium, popular, discount
and economy soaps. Premium soaps are estimated to have a market volume of about 80,000 tonnes.
This translates into a share of about 14 to 15%.
Soaps form the largest pie of the FMCG Market with bathing & toilet soaps accounting for around 30%
of the soap market, by value. Currently, the soap industry is divided into three segments namely
Premium, Popular and Economy/ Sub popular.

To fight competition, major players Hindustan Unilever Ltd (HUL), Godrej Consumer Products Ltd (GCPL)
and Wipro Consumer Care & Lighting are now drawing up fresh game plans. And the accent is clearly on
innovation to gain mind share as well as market share in this overcrowded category.

Major Players
Hindustan Unilever Ltd.

With over seven brands — LUX, LIFEBUOY, HAMAM, REXONA, BREEZE, DOVE and PEARS — has 54.3%
share of the overall soap market. HUL is India's largest Fast Moving Consumer Goods Company; its
journey began 75 years ago, in 1933, when the company was first incorporated. The company stirring
the lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products
and Foods & Beverages and also one of the country's largest exporters. HUL's brands includes Lifebuoy,
Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent, Close-up, Lakme, Brooke
Bond, Kissan, Knorr-Annapurna, Kwality Wall's - are household names across the country. They are
manufactured in over 40 factories across India. In the Rs7,000 crore by sales soap market, HUL’s market
share has dropped to 54.3% in March 2008 from 55.9% in March 2006.

Godrej Consumer Products

GCPL, India’s second largest soap maker after Hindustan Unilever Ltd, has nearly 9.2% market share.
With 11% market share in value terms, it is the second largest soap maker after Hindustan Unilever.
Godrej Consumer Products (GCPL) is a major player in the Indian FMCG market with leadership in
personal, hair, household and fabric care segments. The company is one among the largest marketer of
toilet soaps in the country with leading brands such as CINTHOL, FAIRGLOW, NIKHAR, & ALLCARE.
Fairglow brand, India's first Fairness soap, has created marketing history as one of the most successful
innovations. It is also the preferred supplier for contract manufacturing of toilet soaps, some of which
are the most well-known brands in the country.

Wipro

In the Indian market, Wipro is a leader in providing IT solutions and services for the corporate segment
in India. Wipro also has a profitable presence in niche market segments of infrastructure engineering,
and consumer products & lighting.Wipro has made a large acquisition in the Consumer Care business.
The presence of Wipro in the toilet soap industry can be seen through their brands such as SANTOOR
and CHANDRIKA. With industry leading organic growth rates and the acquisition, Consumer care
business has reached a Revenue run rate in excess of $100 million per quarter.

Procter & Gamble India

Procter & Gamble India (PGHHCL) was incorporated in 1964 after Procter & Gamble, US, acquired
Richardson Vicks, US. Formerly known as Richardson Hindustan (the Indian subsidiary), it was later
named as P&G. It changed its name again in 1998 to Procter & Gamble Hygiene and Health Care in order
to reflect the nature and character of the business of the company. During 2004-05 the company has
increased its installed capacity of Soaps & Detergents and Toilet Preparations etc by 36500 Tonnes and
263 Tonnes respectively. With this expansion the total installed capacity of Soaps & Detergents and
Toilet Preparations etc has increased to 108500 Tonnes and 5875 Tonnes respectively.

Nirma

Incorporated as a private limited company, Nirma was converted into a deemed public company and
then to a public limited one in Nov.'93. Nirma has a leadership presence in Detergents, Soaps and
Personal Care Products. To have a greater control on the quality and price of its raw materials, Nirma
undertook backward integration into manufacture of Industrial Products like Soda Ash, Linear Alkyl
Benzene (LAB), Alfa Olefin Sulphonates (AOS), Fatty Acid, Glycerine and Sulphuric Acid. During 1996-97,
Nilnita Chemicals, Nirma Detergents, Nirma Soaps and Detergents, and Shiva Soaps and Detergents
were amalgamated with the company. The company created 'Nirma Consumer Care Ltd.' - a wholly
owned subsidiary on 22nd Aug.'97, which is the sole licensee of the brand name 'Nirma' within India.
Nirma enjoys a share of 6.74% in soaps.

ITC

ITC, the country’s largest cigarette maker, entered the segment last year and has made a strong
headway in a short time. According to AC Nielsen, its share has grown to 1.75% in just five months
despite the fact that many of its brands such as Superia, Fiama Di Wills and Vivel are currently sold in
only six states.

HINDUSTAN UNILEVER LIMITED (HUL)

a.Company profile

Hindustan Unilever Limited (HUL), a 52%-owned subsidiary of Anglo-Dutch giant Unilever, has been
working its way into India since 1888. Formerly known as Hindustan Lever Limited. The Group's principal
activities are to manufacture and market consumer products. Hindustan Unilever Limited (HUL), a
subsidiary of Unilever, is a fast moving consumer goods (FMCG) company based in India. The company
focuses on efficient delivery to consumers with an improved supply chain, brand building initiatives and
innovation, which has helped the company to sustain its leadership position in the overall FMCG
category in India.
b.Mission

Unilever's mission is to add Vitality to life. They meet everyday needs for nutrition, hygiene and personal
care with brands that help people feel good, look good and get more out of life.
Their deep roots in local cultures and markets around the world give them strong relationship with
consumers and are the foundation for their future growth.

A key requirement is building in the quality expectations of their consumers into their products.

To win consumers’ confidence and loyalty, they need to consistently deliver branded products of
excellent quality.

The Quality Policy describes the principles that everyone in Unilever follows, wherever they are in the
world, to ensure that they are recognised and trusted for their integrity, the quality of their brands and
products, and the high standards they set.
c. Principles of the Quality Policy

• Putting the safety of their products and consumers first.

HUL has stringent mandatory quality standards in place against which compliance is verified through
regular audits and self assessments. These standards ensure they design, manufacture and supply
products that are safe, of excellent quality, and conform to the relevant industry and regulatory
standards in the countries in which they operate.

• They actively engage consumers and customers, translating their needs and requirements into
products and services, thus creating consumer value wherever they position their products.

• Quality is a shared responsibility

Quality and consumer safety is the responsibility of every Unilever employee and Unilever demonstrates
visible and consistent leadership to meet this policy. The drive for quality, in all that they do, is a passion
reflected in their brand development, manufacturing and customer service processes.

d. Present stature

Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods company, touching the
lives of two out of three Indians with over 20 distinct categories in Home & Personal Care Products and
Foods & Beverages. They endow the company with a scale of combined volumes of about 4 million
tonnes and sales of nearly Rs.13718 crores.

HUL is also one of the country's largest exporters; it has been recognised as a Golden Super Star Trading
House by the Government of India.

The mission that inspires HUL's over 15,000 employees, including over 1,300 managers, is to "add
vitality to life." HUL meets everyday needs for nutrition, hygiene, and personal care with brands that
help people feel good, look good and get more out of life. It is a mission HUL shares with its parent
company, Unilever, which holds 52.10% of the equity. The rest of the shareholding is distributed among
360,675 individual shareholders and financial institutions.

HUL's brands - like Lifebuoy, Lux, Surf Excel, Rin, Wheel, Fair & Lovely, Pond's, Sunsilk, Clinic, Pepsodent,
Close-up, Lakme, Brooke Bond, Kissan, Knorr-Annapurna, Kwality Wall's – are household names across
the country and span many categories - soaps, detergents, personal products, tea, coffee, branded
staples, ice cream and culinary products. They are manufactured over 40 factories across India. The
operations involve over 2,000 suppliers and associates. HUL's distribution network, comprising about
4,000 redistribution stockists, covering 6.3 million retail outlets reaching the entire urban population,
and about 250 million rural consumers.

HUL has traditionally been a company, which incorporates latest technology in all its operations. The
Hindustan Unilever Research Centre (HURC) was set up in 1958, and now has facilities in Mumbai and
Bangalore. HURC and the Global Technology Centres in India have over 200 highly qualified scientists
and technologists, many with post-doctoral experience acquired in the US and Europe.

Group operates through seven segments: Soaps and Detergents, Personal Products, Exports, Beverages,
Foods, Ice Creams and Other. The products include home and personal care products, foods and
beverages, industrial and agricultural products. Home and personal care products consists of personal
and fabric wash, household, oral care, skin and hair care, deodorants, perfumery, colour cosmetics and
baby care. Foods and beverages includes tea, coffee, cooking fats and oils, bakery fats, ice creams,
tomato products, fruit and vegetable products, rice, salt, atta and rawa, marine products and
mushrooms. Industrial and agricultural products includes specialty chemicals, bulk chemicals, fertilisers,
animal feeds, seeds, plant growth nutrients, processed-tri-glycerides and agri commodities, yeast,
leather, footwear and carpets, thermometers and plantations.
Its brands are spread across 20 consumer product categories. Hindustan Unilever markets consumer
goods throughout India. The company faces competition from international, local and regional players.
The company derives 44.3% of its revenues from soaps and detergents, 26.6% from personal care
products, 10.5% from beverages, and the rest from foods, ice creams, exports, and other products. As
counterfeit trade increases, the company stands to lose on its brand equity and exclusivity.

New Products introduced by HUL in recent years:

• Lux strawberry and cream
• Clinic plus multi sachet
• Ponds age miracle
• Axe shock and recover
• Paddle pop
• Wheel active Green

e. Divisions

Home and Personal Care

The HPC business is made up of Fabric Wash, Household Care, Personal Wash and Personal Care
categories.
• Personal Wash: Lux, Lifebuoy, Liril, Hamam, Breeze, Dove, Pears, Rexona
• Laundry: Surf excel, Rin, Wheel
• Skin care: Fair and Lovely, Ponds, Vaseline, Aviance
• Oral care: Pepsodent, Close up
• Deodorants: Axe, Rexona
• Colour cosmetics: Lakme
• Ayurvedic personal and health care: Ayush

Foods

The Foods Division of your Company comprises Beverages, Processed Foods, Ice-Creams and Modern
Foods businesses. The Division recorded strong growth in 2007.
• Tea: Brooke Bond, Lipton
• Coffee: Bru
• Foods: Kissan, Annapurna, Knorr
• Ice cream: Kwality walls

f. Hindustan Lever network

Started in 2003, Hindustan Unilever Network (HUN) is HUL's Direct Selling arm. It is a multi-category
direct selling business offering a wide range of high-quality,
high-performance products for its consumers and also exciting business and personal development
opportunities for its consultants. It already has about 7 lakh consultants - all independent
entrepreneurs, trained and guided by HUN's expert managers and trainers.

HUN’s mission is to a create millionaire club in India. There are many consultants who are earning at
over a rate of Rs.1,00,000 per annum. Several consultants earn over Rs.50,000 per month.

HUN offers to build a business with different categories of Home & Personal Care (HPC) and Food
products. They are all essential household needs. And they are all exclusive to HUN, specifically
developed for the Direct Selling channel, and not available in the retail channel.

HUN has already spread to 1500 towns and cities, backed by 28 offices and over 130 service centres
across the country. HUN's vision is to earn the love and respect of India by making a real difference to
the lives of million Indians.
g. Exports
Today, HUL is one of India’s Largest exporters of branded Fast Moving Consumer Goods. It has been
recognized by the Government of India as a Golden Super Star Trading House.

Over time HUL has developed into a viable & competitive sourcing base for Unilever world wide in Home
and Personal Care & Foods & Beverages category of products. HUL is also a global marketing arm for
select licensed Unilever brands and also works on building categories with core country advantage such
as branded basmati rice.

HUL Exports offers high level of service with flexibility and responsiveness thorough out the supply
chain. It has a dedicated organization structure to support this endeavour and this has helped in growth
of these businesses in particular. Intrinsic cost competitiveness in the end to end Supply chain with
appropriate technology and competitive capital investment operations while delivering best in class
quality enables HUL to position itself as a key sourcing hub for Unilever and also become a preferred
partner for Global customers in categories we operate.

HUL’s key focus in the exports business is on two broad categories. It is a sourcing base for Unilever
brands in Home & Personal Care (HPC) and Food and Beverages (F&B) for supplies to other Unilever
companies. It also focuses on becoming a preferred supplier to both non-Unilever and Unilever clients in
three categories in which India, as a country, has competitive advantage – Branded Rice, Marine
Products and Castor and its Derivatives . HUL enjoys international recognition within Unilever and
outside for its quality, reliability and speed of customer service. HUL's Exports geography comprises, at
present, countries in Europe, Asia, Middle East, Africa, Australia, North America etc
h. Water
Pureit, a breakthrough offering of Hindustan Unilever (HUL), comes with many unique benefits –
complete protection from all water-borne diseases, unmatched convenience and affordability.

Pureit’s unique Germkill Battery technology kills all harmful viruses and bacteria and removes parasites
and pesticide impurities, giving you water that is ‘as safe as boiled’. It assures your family 100%
protection from water-borne diseases like jaundice, diarrhea, typhoid and cholera. Pureit not only
renders water micro-biologically safe, but also makes the water clear, odourless and good-tasting.

i. Corporate Responsibility

As in the earlier years, your Company continued to involve itself in social welfare initiatives across the
Country, both through charity and social investment around issues like education, health, nutrition and
initiatives for the economic upliftment of the underprivileged.
The company has commenced a pilot in its tea business, in partnership with an NGO (Partners in
Change) to source tea directly from small producers and thereby improve their livelihood. The effort of
the Company in improving water availability through soil conservation and water harvesting methods
has borne good results. Company believes that brands must be at the forefront of driving social change.

HUL is also running a rural health programme – Lifebuoy Swasthya Chetana. The programme
endeavours to induce adoption of hygienic practices among rural Indians and aims to bring down the
incidence of diarrhoea. It has already touched 84.6 million people in approximately 43890 villages of 8
states. The vision is to make a billion Indians feel safe and secure.
LUX

Lux soap was first launched in 1916 as laundry soap targeted specifically at 'delicates'. Lever Brothers
encouraged women to home launder their clothes without fear of satins and silks being turned yellow
by harsh lyes that were often used in soaps at the time. The flake-type soap allowed the manufacturer
some leeway from lye because it did not need to be shaped into traditional cake-shaped loaves as other
soaps were. The result was a gentler soap that dissolved more readily and was advertised as suitable for
home laundry use.

Lux toilet soap was introduced in 1925 as bathroom soap. The name 'Lux' was chosen as a play on the
word "luxury." Lux has been marketed in several forms, including bar and flake and liquid (hand wash,
shower gel and cream bath soap).

Lux in step with the changing trends and evolving beauty needs of the consumers, offers an exciting
range of soaps and Body Washes with unique elements to make bathing time more pleasurable. One can
choose from a range of skincare benefits like firming, fairness and moisturising.
Lux stands for the promise of beauty and glamour as one of India's most trusted personal care brands.
Since its launch in India in the year 1929, Lux has offered a range of soaps in different colours and world
class fragrances. Lux is a beauty soap of film stars. Lux recognized the need for a compelling message
about beauty that would resonate with women of today.
From the 1930s right through to the 1970s, Lux soap colours and packaging were altered several times
to reflect fashion trends. In 1958 five colours made up the range: pink, white, blue, green and yellow.
People enjoyed matching their soap with their bathroom colours.
In the early 1990s, Lux responded to the growing trend away from traditional soap bars by launching its
own range of shower gels, liquid soaps and moisturizing bars. Lux beauty facial wash, Lux beauty bath
and Lux beauty shower were launched in 1992.

In 2004, the entire Lux range was re-launched in the UK to include five shower gels, three bath products
and two new soap bars. 2005 saw the launch of three exciting new variants with dreamy names such as
“Wine & Roses” bath cream, “Glowing Touch” and “Sparkling Morning” shower gels.

Lux has recently launched its two fruit extract variants – New Lux Strawberry & Cream and Lux Peach &
Cream contain a blend of succulent fruits & luscious Chantilly cream. The most recent addition in the
brand is Lux Crystal Shine.

Study of LUX with respect to 4 P’s

a. Product

A product is anything that can be offered to a market to satisfy a need or want. Products that are
marketed include physical goods, services, experiences, events, persons, places, properties,
organizations, information and ideas.

Product Classification
• LUX is a Tangible, Non Durable Good on the basis of this classification.
• LUX and other soaps fall into the category of Convenience Good

Product Life Cycle

LUX Beauty Bar is in the maturity stage of its life cycle.

Some of the prominent variants

Lux Almond
Lux Orchid
Lux Fruit
Lux Saffron
Lux Sandalwood
Lux Rose
Lux International
Lux Chocolate
Lux Aromatic Extracts
Lux Oil and Honey Glow
Lux Provocateur

LUX Beauty Soap- Form, Features, Style

With icons of beauty endorsing the brand, the offerings made by Lux have always been superior and
have always led the market, setting benchmarks for competition.
Lux has beauty offerings in two of the four market segments – popular and premium, spanning the
needs of varied consumers.

Lux Toilet Soap in the popular segment has in the past years offered its consumers a range of soaps
enriched with the goodness of a variety of nourishing ingredients – rose extracts, almond oil, milk
cream, fruit extracts and honey which are known to harbour the secrets of incredibly perfect skin.

At the upper end of the market is the premium range which continues to offer specialised skincare to its
consumers in the form of International Lux – a range of moisturising, deep cleansing and sunscreen
soaps.

To establish the presence of nourishing ingredients in the new Lux, a unique concept, ‘ingredients you
can see in the soap’, was born. A novel metallic substrate packaging beautifully showcased the
ingredients and its globally accepted ingredient-linked perfumes heightened the sensorial experience.

Each of the soaps in the range has milk cream, with the active ingredients of rose extracts, sandal
saffron, almond oil and fruit extracts. These create an experience in pampering indulgence and luxury
designed to bring out the star in every woman. This is the first time in the Indian chapter of the brand
that the beauty bar variant was being differentiated on the basis of its ingredients rather than its
perfume and colours.
Though Lux International, a premium variant of the toilet soap, launched in 1989, is differentiated on
the basis of its ingredients, the popular version, Lux Beauty Bar was always projected as a “pure and
mild” solution to soft and smooth skin.

Logo

Labelling

The LUX Trade Character or Logo is present prominently on the package. A novel metallic substrate
packaging showcases the ingredients, and a female model is shown on the pack. Also displayed
graphically are the key ingredients.

Packaging
The colors are different for different variants such as saffron for the saffron variant, pink for the rose
extracts etc.The Bars come in package sizes of 100g, 120g, 150 g

Lux has also launched a 45 g variant called Mini Lux priced at Rs. 5.
b. Promotion

The great Indian brand wagon started nearly four decades ago. Great brands sometimes outlast their
ambassadors as proven by Lux which celebrated its 75th anniversary in India.

The first ambassador, Leela Chitnis featured in a Lux advertisement which flagged off the Lux wagon. She
gave way to a galaxy of stars which includes Madhubala, Nargis, Meena Kumari, Mala Sinha, Sharmila
Tagore, Waheeda Rehman, Saira Banu, Hema Malini, Zeenat Amaan, Juhi Chawla, Madhuri Dixit, Sridevi,
Aishwarya Rai and Kareena Kapoor. The last frontier for most actors aspiring to stardom is becoming a
Lux ambassador. The brand has outlasted many soaps. From the beginning, Lux became a household
name across the country.

Advertising

Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services by
an identified sponsor. Ads can be a cost effective way to disseminate messages, whether to build a
brand preference or to educate people.

LUX ADVERTISEMENTS THROUGH THE AGES

Leela Chitnis in the first Lux print adverstisement featuring an indian actress

Aishwarya Rai in a print advertisement featuring Lux international

Priyanka Chopra in the latest Lux advertisement

• USP or the common thread through all the advertisements is the Presence of Movie Stars through the
ages.
• The product has been positioned on the basis of REFERENCE GROUP by using a celebrity popular at
that point in time.
• Some amount of attribute positioning by mentioning the various ingredients has also been done.

Lux campaigns have wooed millions of people over the decades. Popularly known as the beauty soap of
film stars, Lux has been an intimate partner of the brightest stars on the silver screen for decades. An
ode to their beauty, an announcer of their stardom, advertising campaigns on Lux have featured film
stars across the nation, promising their beauty and complexion to ordinary women.

With top movie stars – from Madhubala to Madhuri, from Babita to Karisma and Kareena having
endorsed the goodness of Lux over generations, it was natural that the brand has built equity as the best
beauty soap in India.

From the beginning Lux, by using a leading film star of the time, has fulfilled the consumers’ aspirations
of using beauty soaps via the rationale ‘if it’s good enough for a film star, it’s good for me. This later
moved into a transformation role of having a bath with Lux, which transports the user into a fantasy
world of icons, film stars and fairy lands.

Change in communication strategy

However, the communication was slowly seen to be losing relevance, as consumers were beginning to
question if the film star actually used the brand.
In addition to this, several competitive beauty soap brands had begun advertising using similar methods
of communication. In this context, the global brand team for Lux developed a new communication
strategy. This strategy – bring out the star in you – for the first time moved the brand away from the
long-running film star route. The film star still features in the new communication but not as her
gorgeous self but rather as an alter ego/projection of the protagonist (a regular girl), for a few seconds
of the entire ad.
Thus, for the first time the film star was used as a communication device and not as the main feature of
the ad. The move away from the film star and her fantasy world to a regular Lux user, with the focus on
the protagonist’s star quality, is a change from the norms set by Lux advertising in the past. With the
new communication strategy, the film star is used purely as a communication device to portray star
quality in every Lux user. This can be significantly seen in the latest TV commercial of Lux Crystal Shine
where Priyanka Chopra is portrayed as a normal woman.

This idea – bring out the star in you – puts the consumer at the heart of the brands’ promise. This
promise goes beyond the functional deliverables of soap, beyond bathing and the bathroom to the
world outside. It’s a world where with Lux on her side, an ordinary woman can impact her world with
her own star quality.

This is a successful attempt to bring the brand closer to its users and to give it a more youthful and
contemporary image.

Breaking away from tradition, HLL resorts to a male and metro sexual Shah Rukh to revive Lux, which
turned 75 in 2005.
Sales Promotion

Sales promotion, a key ingredient in marketing campaigns, consists of a collection of incentive tools,
mostly short term, designed to stimulate quicker or greater purchase of particular products or services
by consumers or the trade.
Whereas advertising offers a reason to buy, sales promotion offers an incentive to buy.
Sales promotion includes tools for
Prominent Sales Promotion Schemes Used By LUX
• Lux presented 30 gm gold each to the first three winners of the Lux Gold Star offer from Delhi.
According to the promotional offer that Lux unveiled in October 2000, a consumer finding a 22-carat
gold coin in his or her soap bar got an opportunity to win an additional 30 gm gold. The first 10 callers
every week got a 30 gm gold each.
The offer could be availed only on 100 gm and 150 gm packs of Lux soap.

• Lux Star Bano, Aish Karo contest: All one needed to do was buy a special promotional pack of Lux soap.
The pack comes with a special scratch card. The 50 lucky winners and their spouses were flown down to
Mumbai to live a day like Aishwarya Rai would. They could also be given gift vouchers worth Rs 50,000
from Shoppers' Stop along with an exclusively designed Neeta Lulla sari and a beauty makeover by
Michelle Tung, Aishwarya's preferred designer and stylist. The pièce de résistance was a dinner date
with Aishwarya Rai herself.

• Lux celebrated 75 years of stardom with the Har Star Lucky Star activity.
All wrappers of Lux had a star printed inside them. If the consumer found written inside the star, any
number from “1” to “5”, she would get an equivalent discount (in rupees) on her purchase from her
shopkeeper. If the consumer found “75 years” written inside the star, she will get a year’s supply of Lux
free.

Online contests:

Play the supercharged version of the hit puzzle game, Bejeweled. Create rows of 3 or more identical
stones and you could win a trip for two to a five-star Resort in Goa.

Public Relations:

Not only must the company relate constructively to customers, suppliers and dealers, it must also relate
to a large number of interested publics. A public is any group that has an actual or potential interest in
or impact on a company’s ability to achieve its objectives. PR involves a variety of programs designed to
promote or protect a company’s image or its individual products.
LUX PR Activities
• Press relations:
Lux has been maintaining constant communicating with its customers and potential customers, of the
various developments taking place in the brand by using press relations.
• Events:
Lux celebrated 75 years of existence in a grand way by unveiling Shahrukh Khan as their latest brand
ambassador. Kareena Kapoor, Juhi Chawla, Sridevi and Hema Malini graced the event and made it
special. All the stars have endorsed Lux in the past. The event was held at the grand Intercontinental in
Mumbai.

Limited edition:
Coming up with limited edition of the brand is also a way of attracting attention towards the brand. It
creates a buzz and a feeling of urgency to try out the product and helps in promotion of the brand. This
strategy was also implemented by Lux by bringing out limited editions like Chocolate Seduction,
Aromatic Glow, Festive Glow and Haute Pink.

c. Price

If price is too high then a company may never sell a single item of it. If price is too low then one can lose
money on every sale once all of costs of doing business are considered. Therefore the key is to price it in
such way that it appears attractive to the customer as well as profitable to the company. HUL seems to
have mastered this idea. Prices of HUL are considered the most competitive in Indian market. The main
fact for this huge success story is the strategic pricing decision the company has adopted from time to
time.

HUL always gives value for money to their consumers. It is known for its competitive pricing. It has the
advantage of quoting a reasonable price due to its economies of scale. HUL also can quote a very
competitive price due to its superior technology and optimum utilization of inventory. It has the product
range that meets the needs of all classes of consumers. It has the products that are categorized as
premium and mass products. HUL matches its prices with the competitor who is operating in the same
category. HUL also gives price offs on its products to reward consumers who are using it for a long time
and also to attract new consumers.

The price of the premium segment products is twice that of economy segment products. The economy
and popular segments are 4/5ths of the entire soaps market.

Price segments of toilet soaps

Segment Price/weight
Premium > Rs. 15 / 75 gms
Popular Rs. 8-15/75 gms
Economy < Rs. 8 /75 gms
However, recently HUL has been forced to hike its price by one rupee, to Rs17 (for 100 gm), giving in to
the pressures of inflation. This paves the way for competing soap makers like Godrej Consumer Products
(GCPL) to take price increases.

Lux has versions in all the three price segments:

Recent pricing of Lux (100 g)

Lux Crystal Shine Rs 17
Lux Festive Glow Rs 15
Mini Lux Rs 5

d. Place

Cutting-edge distribution network

HUL’s distribution network is recognized as one of its key strengths -- that which helps reach out its
products across the length and breadth of this vast country. The need for a strong distribution network
is imperative, since HUL’s corporate purpose is “to meet the everyday needs of people everywhere.”
At Hindustan Unilever Limited, distribution network is one of the key strengths that help them reach
their products across the length and breadth of this vast country. It has 2000+ suppliers and associates
7,000 stockists and direct coverage in over 1 million retail outlets across India.
To meet the ever-changing needs of the consumer, HUL has set up a distribution network that ensures
availability of all their products, in all outlets, at all times. This includes, maintaining favourable trade
relations, providing innovative incentives to retailers and organizing demand generation activities
among a host of other things. HUL boasts of placing a product across the country in less than 72 hrs.
The first phase of the HUL distribution network had wholesalers placing bulk orders directly with the
company. Large retailers also placed direct orders, which comprised almost 30 per cent of the total
orders collected.
Today, the goods are transferred from the factory to the company warehouses and are sent to the
distributor from there on a daily basis. From the distributor, the stock reaches the market through daily
sales. Typically, these include the salesman registering the order of a retail outlet and delivering the
goods the next day.
Recently HUL has changed its traditional way distribution and came out with a new strategy of
distribution. It‘s because of the change in buying pattern of the consumer due to more disposable
income. There are different channels of distribution like Modern Trade, which covers all chains of super
markets like Food World, who get the stocks directly from the company. Wholesalers and second leg of
big retail outlets called Super Value stores come under the surveillance of the distributor along with the
mass retail outlets. There is also this new concept in the HUL distribution channel called Kiosk. Kiosk is a
small shop that sells only sachets and low priced items (below Rs.10/-). Kiosk also does not come under
the surveillance of the distributor.

In addition to the ongoing commitment to the traditional grocery trade, HUL is building a special
relationship with the small but fast emerging modern trade. HUL's scale enables it to provide superior
customer service including daily servicing, improving their range availability whilst reducing inventories.
HUL is using the opportunity of interfacing more directly with consumers in this retail environment
through specially designed communication and promotions. This is building traffic into the stores while
yielding high growth for the business.

RSNet

An IT-powered system has been implemented to supply stocks to redistribution stockists on a

continuous replenishment basis. The objective is to catalyse HUL’s growth by ensuring that the right
product is available at the right place in right quantities, in the most cost-effective manner. For this,
stockists have been connected with the company through an Internet-based network, called RSNet, for
online interaction on orders, dispatches, information sharing and monitoring. RS Net covers about 80%
of the company's turnover. Today, the sales system gets to know every day what HUL stockists have sold
to almost a million outlets across the country. RS Net is part of Project Leap, HUL's end-to-end supply
chain, which also includes a back-end system connecting suppliers, all company sites and stretching right
up to stockists. Powered by the IT tools it has improved customer service, while ensuring superior
availability and impactful visibility at retail points.

For rural India, HUL has established a single distribution channel by consolidating categories. In a
significant move, with long-term benefits, HUL has mounted an initiative, Project Streamline, to further
increase its rural reach with the help of rural sub-stockists. As a result, the distribution network directly
covers about 50,000 villages, reaching about 250 million consumers.

Distribution will acquire a further edge with Project Shakti, HUL's partnership with Self Help Groups of
rural women. The project, started in 2001, already covers over 5000 villages in 52 districts of Andhra
Pradesh, Karnataka Madhya Pradesh and Gujarat, and is being progressively extended. The vision is to
reach over 100,000 villages, thereby touching about 100 million consumers. The SHGs have chosen to
adopt distribution of HUL's products as a business venture, armed with training from HLL and support
from government agencies concerned and NGOs. A typical Shakti entrepreneur conducts business of
around Rs.15000 per month, which gives her an income in excess of Rs.1000 per month on a sustainable
basis. As most of these women are from below the poverty line, and live in extremely small villages (less
than 2000 population), this earning is very significant, and is almost double of their past household
income.

For HUL, the project is bringing new villages under direct distribution coverage. Plans are being drawn
up to cover more states, and provide products/services in agriculture, health, insurance and education.
This will both catalyse holistic rural development and also help the SHGs generate even more income.
This model creates a symbiotic partnership between HUL and its consumers, some of whom will also
draw on the company for their livelihood, and helps build a self-sustaining cycle of growth.

SWOT ANALYSIS

SWOT analysis is a basic, straightforward model that provides direction and serves as a basis for the
development of marketing plans. It accomplishes this by assessing an organizations strengths (what an
organization can do) and weaknesses (what an organization cannot do) in addition to opportunities
(potential favorable conditions for an organization) and threats (potential unfavorable conditions for an
organization). The role of SWOT analysis is to take the information from the environmental analysis and
separate it into internal issues (strengths and weaknesses) and external issues (opportunities and
threats). Once this is completed, SWOT analysis determines if the information indicates something that
will assist the firm in accomplishing its objectives (a strength or opportunity), or if it indicates an
obstacle that must be overcome or minimized to achieve desired results (weakness or threat)
(Marketing Strategy, 1998).

The SWOT analysis summarizes the external environmental factors as a list of opportunities and threats.

SWOT PROFILE OF LUX

STRENGTHS

1.Strong Market Research (door to door sampling is done once a year in Urban and Rural areas)
2.Many variants (Almond Oil, Orchid Extracts, Milk Cream, Fruit Extracts, Saffron, Sandalwood Oil, and
Honey to name a few)
3.Strong sales and distribution network backed by HLL
4.Strong brand image
5.Positioning focuses on the attractive beauty segment
6.Dynamically continuous innovation of the product and brand rejuvenation – new variants (Aromatic
Glow and Chocolate Seduction and Lux White Spa body wash) and innovative promotions (22 carat gold
coin promotion – ‘Chance Hai’)
7.Perceived to have high value for money (strong brand promotion but relatively lower price which is a
winning combination in the popular segment)
8.Though it is in popular segment, it is having mass appeal/market presence across all segments (15% of
the soap market captured by Lux (sales / volume)
9.Unique advantage of having access to resources and assets of HLL

WEAKNESSES

1.Lux is mainly positioned as beauty soap targeted towards women, hence it lacks unisex appeal
2.Usage rate/ wear rate is high and is generally mushy and soggy
3.Some variants like the sunscreen, International variant did not do well in the market
4.Certain advertisements like the recent one with Shah Rukh Khan resulted in controversial
interpretations of the message of the advertisement and lead to some loss of focus (of message of the
advertisements)
5.Stock out problems - replenishment time is high in semi-urban/rural areas
6.Earlier positioning as the “soap of the stars” has somewhat alienated the brand from a portion of the
consumers especially in rural areas.

OPPORTUNITIES

1. Soap industry growing by 10% in India

2. Beauty segment’s Compounded Annual Growth Rate (CAGR) is very high. An indication of this is that
Fair and Lovely’s segment is increasing at a fast rate - Lux must reinforce its presence in the beauty
segment
3. More promotions like price-offs and samples
4. Retentive strategy required as the soap segment is in the mature stage of its product life cycle
5. Line extension – probably with more variants catering to the beauty segment like natural, herbal soap
etc
6. Liquid body wash is currently in the growth stage – Lux should come out with more variants in this
segment
7. Level of servicing is high during sales promotion schemes – this could be brought down
8. It has a large market share and hence has a strong hold over the market

THREATS

1. New entrants/local competitors/MNCs would increase the competition (Camay, P&G)

2. High internal competition – Pears also catering the beauty segment (also from HLL stable)
3. Excessive dependence on beauty segment makes Lux vulnerable to changing customer tastes
4. Technological change makes the existing products obsolete – Lux should focus on technological
innovations like Body Wash
5. Its in the maturity stage in the Product Life Cycle and has a threat of slipping down to decline stage if
constant reinvention of the brand is not carried out.

Competitor analysis

Internal competitors

Lifebuoy:
Born: 1895
History: Owned by Unilever Plc., the parent company of Hindustan Unilever Ltd.
Status: Has 18% market share in the bathing soaps category, worth Rs6,000 crore
Lifebuoy landed on Indian shores in 1895, when the country was in the grip of a plague epidemic. With
its positioning as a powerful germicidal and disinfectant, and with a strong carbolic smell, it was what
the nation was looking for. But the health advantage waned over time as competitors came out with
soaps that promised both health and beauty.
It was around 2002 that the product moved from being a hard soap to a mild soap that delivered a
significantly superior bathing experience. The new soap had a refreshing fragrance and its overall
positioning changed, painting its promise of health in softer, more versatile and responsible hues—for
the entire family. The packaging was also changed: The rugged looking packs were soon replaced with a
softer pinkish cover. This was followed by a series of ads highlighting the soap’s germ-fighting benefits.
Lifebuoy had become a family soap with hygiene as its core promise. Right from the early days, the
brand has preferred effective communication to celebrities. An exception is its recent, limited exposure
campaign with cricketer Yuvraj Singh.

External Competitors

Santoor:
Santoor is the flagship brand in the Wipro Consumer Care & Lighting stable and the 2nd largest brand of
soap in India in the popular segment of the category. The brand enjoys two decades of trust since its
launch in 1986 and has grown to be counted amongst the top brands in the Country in an intensively
competitive market. Millions of women across the country have discovered the secret of younger
looking skin with Santoor. It is a truly unique soap that combines the goodness of natural ingredients -
Sandal, Turmeric and natural Skin Softeners. Sandal provides a cooling and soothing effect that softens
skin, while turmeric controls formation of skin darkening pigments like melanin, to give skin a radiant
glow. Natural Skin Softeners make skin soft and supple. The end result, skin that is so healthy and
beautiful, it lies about your actual age!
Amongst the first brands in the Country to launch an offering with the twin ingredient benefits of Sandal
and Turmeric, Santoor has over the years moved from a purely natural ingredient based appeal, to one
of the most preferred beauty soaps of the day. Today, Santoor is one of the fastest growing soap brands
in India. Santoor is available in three variants – Santoor (Sandal & Turmeric), Santoor White (Sandal &
Almond milk) and Santoor Chandan which is a premium soap manufactured with extracts of Sandalwood
oil – a favourite of discerning consumers.
Cinthol:

Cinthol the popular and much-loved brand of Godrej Consumer Products Limited (GCPL)have been a
favourite of people for many years. All different soaps in its range are having feel-fresh fragrance and
high TFM index. Cinthol’s range covers an economic Lime-fresh, the medium deo-soaps (spice,
lime,cologne and the new ’sport’) and a slightly expensive “Cinthol-Original”. For decades, Cinthol-
Original is one of the best soaps made in India. It had a simple red-cover which attracts none! But was
still able to sustain itself in the market . Godrej has now launched the improved Cinthol range. Cinthol
now offers a deo-range of soaps, talc and deo-sprays in three exciting fragrances - Classic, Cologne and
Sport in a trendy new packaging. It also offers Cinthol fresh soap and Cinthol Regular soap with new
exciting packaging. The eye-catching and vibrant packaging symbolizes a sense of adventure, zest and
action. The new Cinthol range brings 24-Hour Confidence through Active Deo Formula, which controls
body odour, Powerful DryShield that absorbs sweat, UltraScent Technology for long lasting fragrance
and Freshness that revitalises you 24x7.The new range will be available across the country at modern
retail and other outlets and will be supported by high-impact advertising on television, print, out-door,
on-line and radio.

Vivel and Superia:

The Vivel Di Wills range is available in two variants. Its unique carton pack has been developed by ITC's
design team to provide a novel consumer experience. Vivel Di Wills Sheer Radiance is enriched with
Olive Oil, to provide skin lustre to make it radiant. Vivel Di Wills Sheer Crème is enriched with Shea
Butter, to moisturize skin to make it soft and supple.

The Vivel range of soaps is available in four variants:-

Vivel Young Glow is enriched with Vitamin E and Fruit Infusions which help in providing youthful glow to
the skin.
Vivel Satin Soft is enriched with Vitamin E and Aloe Vera which help the skin feel beautifully soft.
Vivel Sandal Sparkle is enriched with Sandalwood Oil and Active Clay which helps in providing clear skin.
Vivel Ayurveda Essence is enriched with multiple Ayurvedic Ingredients which help protect skin from
germs and harsh environment, keeping it healthy and beautiful.

In the popular segment, ITC has launched a range of soaps and shampoos under the brand name
Superia. Superia Soaps enriched with natural ingredients give radiant glowing skin. Superia Soaps are
available in four variants :
1. Fragrant Flower: with the fragrance of Rose & Lavender Oil
2. Soft Sandal: with the fragrance of Sandal & Almond Oil
3. Natural Glow: with Neem & Coconut Oils
4. Healthy Glow: with Orange Oil

Market Segmentation
“One cannot be everything to everyone, but can be everything to a selected few”. This is the basis for
segmentation. The definition of segmentation is “market segmentation is a process of dividing a
heterogeneous market into homogeneous sub units. Market segmentation is the identification of
portions of the market that are different from one another. Segmentation allows the firm to better
satisfy the needs of its potential customers.
A good market segmentation will result in segment members that are internally homogenous and
externally heterogeneous; that is, as similar as possible within the segment, and as different as possible
between segments.
Market segmentation of Lux

As mentioned above, market segmentation is done so as to satisfy the customers more efficiently. For a
brand like Lux, which has a broad customer base, this factor becomes absolutely critical.
The segmentations are done basically on the basis of factors like:
Lux soap concentrates in the beauty soap category. A brief description of the various factors Lux
considers are:

Gender :

Lux has been, since its introduction seen as a soap for women. Lux as a brand symbolises beauty. The
Lux ads has hosted a bevy of film stars such as from Madhubala, Babita, Hema, Karisma to Kareena all
endorsing the goodness of Lux over generations. This was done in order to attract women who wanted
to look and feel like the stars they idolised.

Age :

Lux is seen to mainly attract customers that fall within the age group of 16 to 35. In order to cater them,
Lux comes up with new and interesting variants. One of the latest entrants, Lux Crystal Shine is mainly
targeted at the youth . So is the Black Provocateur which symbolises boldness . Another example is the
chocolate variant lux which was a novel idea. All these are introduced to catch the attention of the
youth.

Income :

One of the essential characteristic of an FMCG product is an affordable price which is very important for
its fast sales. Its the meeting point of demand for a product and its price that decide whether the
product will sell or not. And the demand for a product is highly dependant on the income of the
customer. Lux is not a very costly toilet soap. Its price varies from Rs.15 to rs.20.Therefore its target
market starts from the middle income group.

Positioning
Lux—derived from the word luxury— was launched in 1899 as a laundry soap in the UK. In 1925, the
brand was extended to the toilet soap category. It was positioned as a beauty soap in India, and HUL has
since used successful film actors of the time—such as Leela Chitnis, Madhubala, Hema Malini and
Kareena Kapoor—to endorse the product.
Lux’s secret of longevity has been its consistent evolution—be it the soap colour, packaging or new
variants, the brand has banked on innovation to keep its youthful image intact. Extending the soap cake
to a range of shower gels, liquid soaps and moisturizing bars has helped the brand keep consumers
excited and the competition at bay.
What has not changed is the consistency in its communication and its positioning. Its tag lines—if it’s
good enough for a film star, then it’s good for you too to Play with beauty—have conveyed the same
message over the years. It taps into an emotion very close to humanity’s basic need—social interaction.
The brand has always hired celebrities when they have reached a certain height rather than using them
at the start of their careers. This has helped the customers to relate to their idols on screen.
From being a soap for the stars, Lux has recently started positioning itself in such a way that the ordinary
woman can relate to the brand. The advertisements show not the star, but the actress in the character
of an ordinary girl or woman, which any woman can identify with. This positioning has helped the brand
in striking a chord with the target consumers.

BCG Matrix

BCG matrix method is a portfolio management tool developed by Boston Consulting Group .It is a
method based on the product life cycle theory that can be used to know what priorities should be given
in the product portfolio of a business unit.To ensure value creation ,a company should have a portfolio
of products that contains both high growth products in need of cash inputs and low growth products
that generate a lot of cash.There are 2 dimensions : market share and market growth.Placing products in
the BCG matrix results in four categories in a portfolio of a company:

Star : High market growth and high market share

Cash cows : Low market growth and high market share
Question marks :High market growth and low market share
Dogs :Low market growth and low market share

Innovation seems to be the main theme of the Indian soap industry in 2008. With the entry of ITC, the
stage is all set for a major tussle between the new entrant and existing players in the Rs 6,500-crore
branded toilet soaps sector in India. The soap industry is seen to have a market growth rate of about
10%. This shows that industry has a high growth rate. HUL is a market leader in the industry and its soap
Lux enjoys a market share of 17 % in India. So according to the concept of BCG matrix any product which
has high market growth and market share is classified as STARS. The major objective of products coming
in Stars is to maintain their high market share. HUL comes up with various variants in LUX quite
frequently in order to maintain their position.
Ansoff model for Lux:

The Ansoff Growth matrix is a tool that helps businesses decide their product and market growth
strategy. Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on
whether it markets new or existing products in new or existing markets.

Current Product New Product

Current Market Market Penetration Strategy
Attract users : Gold coin offer
Gold coins hidden in soaps selectively
100 gm contained 3-gm gold coin
150 gm contained 5-gm gold coin

Product Development Strategy

Product Reformulation: Introduced variants with different ingredients – Honey, chocolate, strawberry,
etc
Product feature addition:Lux Crystal shine (with sparkles)
Product line extension : addition of small size (Rs 5/-,45 gms)
New
Market Market development Strategy
A new variant called Lux Nalangu pindi was introduced in Andhra Pradesh.

Diversification Strategy
Related Diversification : Introduction of body wash

Lux has been in this industry for more than 75 years. It has constantly applied various strategies to
survive and succeed in the industry. Some of the recent ones are mentioned in the above model.

Recommendations

Lux has been following a trend of constant product development and improvement since its inception.
This has always proved to be successful for the brand. Therefore a similar strategy can be followed in
the future: Lux can go for a high end Ayurvedic variant. Lux has been associated with beauty and
feminine grace till now. In the present day consumers are into naturopathy and believe in natural
treatments like the Ayurveda. Keeping with this trend, Lux can foray into Ayurvedic variant. HUL already
has Hamam soap in this category. But it is a low priced soap whose target audience is quite different
from Lux. This new variant can provide the current customers of Lux with a blend of both class and
natural goodness.

Today’s children are tomorrow’s customers. Children have a major share in the decision making process
of consumers. Therefore it will be a viable decision to launch Lux Kids Special soap. By doing this Lux can
“catch them young” and get a loyal customer base from them. This variant can be in vibrant colours as
opposed to the soft colours used currently. The fragrances can also be made more “fun” and vibrant.

Lux has high penetration in the urban and semi urban areas. However, it has only 19.8% penetration in
the rural areas. The rural market has great untapped potential, which HUL has not concentrated on till
now. Consumers are becoming more and more aware and undergoing a surge in disposable income. This
huge opportunity can be explored by Lux. HUL already has a strong distribution channel in almost all
regions. What is needed here is a change in the communication strategy to reach out to the rural
customers. The various channels of communication should be made more appealing to this rural
segment of customers